Ratan Tata may remain head of group trusts

Tata Sons is the promoter firm of the group, through which it wields control over 90-odd companies of the Rs 3,79,675-crore (Rs 3,796.75 billion) salt-to-software conglomerate.

Sources in the know say just like his predecessor, J R D Tata, Ratan Tata will likely remain chairman of the trusts for life. Before Ratan Tata's appointment, however, the chairmanship of the two trusts was held by different individuals.

While J R D Tata was the chairman of Sir Dorabji Tata Trust till his demise in November 1993, Naval Tata (Ratan Tata's father) was at the helm of affairs at Sir Ratan Tata Trust until his death in 1989.

In both cases, the chairman's baton was passed on to Ratan Tata, also the chairman of Tata Sons.

Ratan Tata may remain head of group trusts

However, while individually the two trusts do not hold a majority stake in Tata Sons, together they do so, based on the shareholding patterns available in the public domain.

When contacted, a Tata Sons spokesperson said, "The Sir Ratan Tata Trust was set up in 1918 and the Sir Dorabji Tata Trust in 1932.

The chairmanship of the trusts has nothing to do with the chairman of Tata Sons. Furthermore, the chairmanship of the trusts does not have a retirement age, so no changes have been made in the trust deed for Ratan Tata."

Apart from these two Tata trusts, the Shapoorji Pallonji family has a stake of around 18.3 per cent in Tata Sons.

Officially, the Tata Group websites say various trusts, including Sir Dorabji Tata Trust and Sir Ratan Tata Trust, control over 66 per cent in Tata Sons.

Ratan Tata may remain head of group trusts

Tata Sons also has a 50 per cent stake in Tata Industries, an investment vehicle which concentrates on new emerging opportunities and high-tech areas.

The five-member selection committee set up to find a successor to Tata Group chairman Ratan Tata in August 2010 has N A Soonawala, former vice-chairman, Tata Sons, R K Krishna Kumar, director, Tata Sons, Cyrus Mistry, the younger son of Pallonji Mistry, Lord Bhattacharya, a businessman based in the UK who runs Warwick Manufacturing, and Shirin Bharucha, a lawyer for the group.

Ratan Tata may remain head of group trusts

The panel is expected to name the successor to Ratan Tata by the year-end after an aggressive global search.

Among the hot favourites is Ratan Tata's half-brother Noel Tata, who after a successful stint in Trent (the retail business of the group) has also been given the responsibility to run Tata International as a managing director.

The selection panel is also reportedly discussing the creation of a new post of group chief executive officer at Tata Sons.

The move is meant to create an enabling structure for the new chairman, where he or she will have an experienced team to share some of the responsibilities of running the conglomerate through Tata Sons.

Image: N Tata (sitting right to left), the founder of the Tata Group; Sir Dorabji Tata, (standing right to left); the elder son of J N Tata, Sir Ratan Tata, his younger brother and R D Tata, father of JRD Tata.Photographs: Courtesy, The Tata Group